Question

Camila plans to go for vacation to Australia in 5 years from now. She estimates that she will need $27,762 for the trip. How much does she need to place in a saving account today that earns 2.50 percent per year (compounded quarterly) to accumulate this amount? Round the answer to two decimal places

Answer 1

Calculate the present value of the investment as follows: vlfel-PV(2.50%/4,5*4,,-27762,1) Function Arguments PV Rate 2.50%/4 Nper 5*4 0.00625 20 number -27762 Pmt Fv 2776 Type 1 1 = 24509.41144 Returns the present value of an investment: the total amount that a series of future payments is worth now. Fv is the future value, or a cash balance you want to attain after the last payment is made. Formula result = 24509.41144 OK Cancel Therefore,the present value is S24.509.41